Will YOU Ride the For-Profit College Wave?

College Search & Selection
1

<p>An article in today's Chronicle of Higher Education, "Economic Downturn Is a Boon for For-Profit Colleges," noted that, as a growing number of private colleges struggle with dwindling enrollments and as public schools face budget cuts, "the for-profit college industry, unlike the rest of higher education, is enjoying a financial tailwind that is only likely to improve in the next couple of years." </p>

<p>The story points out that for-profit schools offer specific job-focused training and, often, their own in-house loans (even for those who couldn't get a loan elsewhere) that make them attractive options. "If anything, many of the bad-news trends now roiling the economy—unemployment projections of 10 percent, state budget cuts, declining support for nonprofit institutions, even the near-collapse of the Big Three automakers—are likely to translate into even higher enrollments and higher profit margins for the companies," the Chronicle claims.</p>

<p>While I don't expect that Ivy-angsting College Confidential members will pass up a shot at Dartmouth for DeVry, are there others of you out there who are now considering these for-profit schools even though a couple years ago you might have said, "No way!"?</p>

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<p>Meh if I couldn't get into an ideal 4 year school I'd go with a local community college, not a for-profit school.</p>

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<p>Hmm I'll have to read that article. Our copy of the chronicle just arrived today. My dad is the chancellor of a for-profit college. I'll have to ask him if he thinks his school's enrollment will increase.</p>

<p>As for me, since it would be free, I'd consider going to the one my dad works at if for some reason he was still in that job, but unable to pay for my college.</p>

4

<p>That's interesting, Buffs2013. It would be interesting to know if your dad sees changes of any sort at his school that he thinks are linked to the current economic climate.</p>

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<p>APOL stock has done pretty well over the last six months.</p>

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<p>APOL (the Apollo Group) is parent to University of Phoenix which is well known for its online programs for working adults. It's easy to see why there's a market for such offerings, but the Chronicle article suggests that the "bricks and mortar" for-profit schools are benefiting from the economic downturn. </p>

<p>So I'll be curious to see what happens with this trend.</p>

<p>mephist0 would pick a community college over a for-profit school, and doubtless many others would do the same. So I'd also be curious to know why those who did choose a proprietary school made that decision. Was it due to unique classes and/or good reputation (e.g., Full Sail in Orlando)? Convenient location? The opportunity to focus immediately on an area of interest without taking required core classes? Availability of private loan from the for-profit school? Other?</p>

7

<p>Some rough statistics from IPEDS:</p>

<p>Out of 504 private, 4-year, for-profit schools in 2007...</p>

<p>Total enrollments increased from 200,000 in 1997 to 750,000 in 2007 (at least 215,000 due to online).</p>

<p>More than half had fewer than 500 full-time students.</p>

<p>The average number of full-time students was about 1400 (about 950 if you exclude the 225,000 fulltime students at U Phoenix online).</p>

<p>The average number of part-time students was about 500.</p>

<p>On average, 42% of students were in the 18-24 year-old age range.</p>

<p>The average freshman class size that met the standard definition of "first-time, full-time freshman" was about 18 students despite an average full-time enrollment of about 1400 students and despite . (Difficult to make sense out of these statistics)</p>

<p>The average graduation rate of these few true freshmen was 33%. The average retention rate from first to second year was 54%. But, this is based on just a small percentage of total enrollment. I would guess the graduation and retention rates are actually lower.</p>

<p>But, this is an entirely different model of "higher education" and the usual metrics may not apply. Students may achieve their goal by just getting training in specific areas. They may not be seeking a degree. It looks like only a small percentage are actually seeking a degree, but I am not sure.</p>

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<p>Interesting stats. Thanks. I would've guessed a somewhat lower percentage of students in the 18 to 24 group.</p>

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<p>This makes a lot of sense, and it could also be the reason that some students choose a pricier proprietary school over a cheaper CC. That is, they go to learn a specific skill, and once they feel they've learned it, they're outta there. Of course, I've also known of students who have been hoodwinked into attending the less reputable for-profit schools, lured by promises of sure-thing job placement that didn't pan out.</p>

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<p>I used to go to a for-profit elementary/middle school, and it was a disaster, because schools will try to earn a bigger profit at the expense of the students. Education should NEVER be for-profit</p>

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<p>Marketplace:</a> Logging on to college</p>

<p>The above is a story by NPR's marketplace that deals with similar economic trends and their impact on higher ed - only it focuses on the market for online coursework and degrees. Personally, I find it interesting to see how the financial difficulty seems to be opening up less-traditional options.</p>

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<p>I think that people who are committed to a classic four year college education, or a two year community college education followed by transfer to a four year college, will not change their plans in that regard, though they may have to work for a year or more to save money for tuition. What we are seeing is a huge increase in state school applications. </p>

<p>As for University of Phoenix, I think that is a successful business model for people who have unique circumstances with family, finances or credentials that will be pretty much in the same situation in the current economic climate. </p>

<p>Devry also attracts people looking for a specific program, which are more technical in nature or lower level clerical jobs, court reporters and such. I dont think that changes.</p>

<p>Community colleges may see a slight increase as a means of saving money for some people with the clear intention to transfer into a four year after they complete their two year stint. </p>

<p>I lived through the recessions of previous decades in the 70's, 80's and 90's. It wasnt fun. But it wasnt THIS scary. I dont think people realize how scary this one is because of the systemic risks and the sheer size of the derivative bubble that is unwinding. Moreover, we are now all interconnected (globalism) for better or worse. The internet has been a boon for some and it sure is handy and convenient. But it has also destroyed industries and careers and elimnated a lot of jobs. I had a deep discussion with a brilliant man 10 years ago about the "coming age" and we both concluded that the "information age" would be welcomed on the front end and despised on the back end. We are living it now. Call me a dinosaur, but the facts are very clear. In previous recessions we were largely self sufficient, didnt import very much oil, had a trade SURPLUS, and a strong manufacturing based economy. None of that is true this time. I am preparing for an L shaped "recovery". We CLUNK down another notch or two yet to go before we hit the bottom HARD...then plod along flat for a long period of time afterwards...years. I think people will be surprised by the market rally at year's end and fooled into an "all clear sign". But we will get hammered again in January. And in March. JMHO. How all of that shapes our "new world order" I have no idea. Healthcare is the one industry that is thriving right now, but that too may change if we go to a nationalized healthcare plan. </p>

<p>The changes we have seen in the last 10 years have been nothing short of stunning. And the changes we have seen in the last 90 days have been shocking. Old line investment banking firms more than 100 years old.....GONE! POOF! That will affect law firm employment, banking employment and all the companies that supply them or support them. We are in for some rocky times.</p>

<p>This time is different. What am I doing? My oldest is still a liberal arts major. I dont know where she ends up working, but I counseled her that the US Government may be her most secure option. </p>

<p>BofA announced they are laying off 35,000 employees. That is 35,000 families who are going to lose their chief bread earner, and 35,000 families who are at risk of losing their homes.</p>

<p>Scary indeed.</p>

<p>Good luck.</p>

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<p>One reason that I believe these "for profit" schools are successful, is that they capitalize on a market that are completely ignored by traditional colleges and universities: people who already have a college degree but want to change fields. I am sure that a lot of their enrollment is made up by college grads who have a couple years of experience in their field and want career advancement more quickly. I know a number of my coworkers have gone back for nursing or vetrinary tech degrees after traditional bachelors/masters because the jobs are more plentiful and offer a quicker career ladder.</p>

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<p>
[quote]
I am sure that a lot of their enrollment is made up by college grads who have a couple years of experience in their field and want career advancement more quickly.

[/quote]
</p>

<p>This is what I thought, too, which is why I'm surprised that 42% of proprietary school students are allegedly in the 18-24 age range. Of course, that's still much lower than at traditional colleges, and it could also mean that many of the "freshmen" at proprietary schools are closer to 24 than to 18.</p>

<p>I'm still wondering if those numbers will increase in today's current climate. Certainly in my own purview, I don't see seniors beating a path to the for-profit schools, but my horizons are fairly limited in that respect.</p>

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<p>There seems to be a lot of variability among companies in the percent of students age 18-24.</p>

<p>University of Phoenix 14.1%
DeVry 38.6%
IIT 48.6%
The Art Institute 67.9%</p>

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<p>Having a daughter who will enroll somewhere in 2010, I have come to the following conclusions.
Attending a college is as much about the quality of life you enjoy during a most impressionable time in your life as it is about academic excellence. My visits to colleges have solidified this belief. What I expect for my $45,000 each year is that my daughter will be exposed to an academic program that she will be able to draw upon for the rest of her life, that her surroundings (campus, environment, etc...) will be an experience remembered forever, that her friendships will blossom with others that share our (her) ideals and values, that her college will draw out from her the talents and maturity that we know exists in her, and prepare her to face the world as a thinking individual.
After all this is (hopefuly) done she will then start to think about her carreer. Grad school, law school, med school, B-school? who knows. How can we know when they are only 16 or 17?
I find it hard to imagine that For profit schools can deliver on all these expectations. Show me the 600 acre campus that delivers on all these concerns and I will show you an institution that is not as concerned with profit as a motive for educating students.</p>

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<p>Well, a lot of private colleges still meet full need. </p>

<p>Others offer merit scholarships that cover full tuition (maybe even some extra at schools like Oklahoma U, UCF, etc)</p>

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<p>Well I asked my dad about his school, and he said that while normal enrollment is up some, online enrollment is exploding. He said that lately, about 5000 students enroll for the online programs every six weeks or so, and he expects this trend to continue.</p>

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<p>Buffs2013--Does your dad's school offer any sort of career counseling and/or placement? If so, is this available to online students? Does the school award an actual degree or simply offer courses (and perhaps a certificate of completion or a diploma)?</p>

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<p>It does offer career services to both the on-campus and online students.</p>

<p>The school offers certificates, associate's degrees, bachelor's degrees, master's degrees, and even a couple doctorate degrees. All degree programs are fully accredited.</p>

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<p>
[quote]
What do you want out of college? </p>

<p>Having a daughter who will enroll somewhere in 2010, I have come to the following conclusions.
Attending a college is as much about the quality of life you enjoy during a most impressionable time in your life as it is about academic excellence. My visits to colleges have solidified this belief. What I expect for my $45,000 each year is that my daughter will be exposed to an academic program that she will be able to draw upon for the rest of her life, that her surroundings (campus, environment, etc...) will be an experience remembered forever, that her friendships will blossom with others that share our (her) ideals and values, that her college will draw out from her the talents and maturity that we know exists in her, and prepare her to face the world as a thinking individual.
After all this is (hopefuly) done she will then start to think about her carreer. Grad school, law school, med school, B-school? who knows. How can we know when they are only 16 or 17?
I find it hard to imagine that For profit schools can deliver on all these expectations. Show me the 600 acre campus that delivers on all these concerns and I will show you an institution that is not as concerned with profit as a motive for educating students.

[/quote]
</p>

<p>Yes, those are your expectations for a traditional (ivy-covered buildings, pep rallies, dorm-living, etc.) college experience, so, right now, your daughter is not part of the market for a private/proprietary career college. I worked in that industry for almost 20 years (now in public education) - this sector of higher education is not for your daughter at this point in her life. It might be for her in a couple of years, if she finds that the traditional college experience is not for her (the Katharine Gibbs Schools, which my company owned for a few years, made its rep taking in these LAC Art History major dropouts and training them as secretaries/administrative assistants), or a few years from now when she wants some sort of specific skill/career training. </p>

<p>The target students for private career colleges are typically those who have never fared well in traditional education, barely made it through high school or maybe had to get a GED or an equivalency diploma; who disliked school and were happy to get out and after a few years of dead-end, low-wage jobs, have come to the realization that they need to learn a skill to be employable. They need to be able to keep working while they go to school, so they need some flexibility in their course schedule - perhaps all evening courses, or weekend, or some online, whatever. They will shy away from traditional 4-year schools as it reminds them too much of their earlier unpleasant experiences, some community colleges may be okay but others are too much like that traditional experience. They aren't interested in and don't need and don't want to pay for dorms, football teams, courses that aren't directly related to their goal, etc. Many of these students find that the smaller classes, personal attention, career and skill directed curriculum bring out, for the first time in their lives, the learner in them. Many of them come from a family background where going to college was not emphasized or not deemed important or deemed too high falutin'.</p>

<p>Certainly, there were some shoddy operations, but there were some really good ones as well, and there are millions of graduates out there who had no career direction before they found this sector of higher education. The private career college industry has always been counter-cyclical in that times of recession and/or increased unemployment were a boom time as people begin looking for career-specific training that can be completed fairly quickly to qualify them for new careers or to increase their employability in their current career to make them less likely to be in the next lay-off. The 33% graduation rate (i.e., those completing their programs within 1.5x the standard length (a 1-year program within 1.5 years, a 2-year program within 3 years, or a 4-year program within 6) is consistent with what I observed during my time in the sector. However, if you take all of "traditional" higher education, the actual graduation rate is not significantly higher than that, and traditional education is working with students with proven academic success and a greater support system. The private career college sector serves a student market underserved by the other sectors, a market that tends to swell during difficult economic times. Not many on CC are in that particular market, but some will be one day.</p>